The world might be at sea, but so are a growing number of wealthy holidaymakers. The cruise industry is thriving and operators are managing to raise ticket prices, despite rising costs of fuel, rerouted travel plans and disease outbreaks. Royal Caribbean, Norwegian, Carnival and Viking each reported record revenue last year.
But the rising tide isn’t lifting all boats — and it’s at the high end of the market that trouble has struck. The Ritz-Carlton Yacht Collection illustrates how the core principles of luxury, namely that quality and scarcity drive profitability, can lose their efficacy away from dry land.
Since launching in 2017, the Ritz-Carlton branded cruise operator — not actually an affiliate of the Marriott International-owned hotel chain — has accumulated nearly $700mn in net losses and required over $1bn in capital injections from shareholders, who include Oaktree Capital Management, Singapore’s GIC and Mohari Hospitality. Last week, creditors including Caixa Bank and Crédit Agricole agreed to loosen terms and delay repayment dates on part of its $1.5bn of net debt.